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Opinion Contributor

U.S. growth in 'prosperity economics'

In the process, we will also rebuild faith in government and public institutions, placing them on the side of ordinary workers who have wondered—as banks too big to fail received quick help — if they were too small to save.

Which brings us to the last great area of reform, and precondition for them all: fixing our democracy. The virtuous cycle of shared prosperity runs through a democracy that is responsive to the middle class. Today, economic winners write the economic rules, and both our economy and our democracy suffer. We need to curb the power of narrow economic interests, put in place publicly financed campaigns, guarantee workers have the right — in practice, not just in theory — to organize and bargain collectively, and ensure all Americans are able to exercise their franchise.

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Growth, security, democracy — these light the true path to shared prosperity. In contrast, Ryan’s budget prescriptions threaten to greatly worsen the situation. Not only would Ryan’s budget reduce public investments and cut popular programs that provide economic security; it would also pile new tax cuts for the wealthy on top of the Bush tax cuts — cuts that can’t plausibly be funded through the loophole-closing that Ryan claims will do the job.

Alas, elements of this agenda have gained such traction inside the Beltway that even if Obama wins reelection, we may end up with cuts in education and economic security only slightly less draconian than those in GOP blueprints. This would be a huge loss for our society — and a huge lost opportunity to revive faith among middle-class Americans that government can address their strains.

We face a stark choice: an austerity agenda focused on debt, or a growth agenda focused on democracy. With political will, political action and guidance from prosperity economics, we can take the right path — the path to shared prosperity.

Thanks Politico for changing the debate. Strong article. Articulates that Government should focus on the majority of Americans. Those in the 50K to 150K income bracket who earn their money from employment not capital gains. Those that live in and around our metropolitan areas where the majority of people live. We should focus on schools, infastructure, healthcare. Goverment policy shoud focus on the needs of this group over all others. That is where our innovation and job growth comes from not trickled down from investors.

I'm getting tired of worn out debates on minor adjustments in marginal tax rates, inane discussions on how government investment is less than private investment, or how the 14 trillion dollar economy is solely run by our 4 trillion dollar Government. Especially from those who never finished college, who think economics is just a bunch of platitudes, and think the world economy works just like their personal finances.

The authors sound like they are in favor of increasing U.S. government outlays for: public infrastructure projects; public union member employment in teaching, police work, fire fighting, and similar services; publicly provided health care; and people's public retirement programs. The only mention of restraining federal spending or reducing federal regulatory overreach in the article is derogatory, when the authors criticize U.S. Rep. Paul Ryan's detailed budget plan entitled "Path To Prosperity." Even some Democrats are implicitly criticized for being concerned about the federal government's debt (which has risen by 60% under President Obama, from $10 trillion to $16 trillion; the Obama administration projects that the federal government's debt will rise by another 25%, to $20 trillion, by 2016).

No wonder such policies, supported by the authors, are very popular in the Obama White House and among its left of center constituents. This approach is like having a child in a candy store who can have anything he or she wants, without having to pay. There is no pain for the ones receiving federal payments. The authors believe that federal government spending "drives and creates" prosperity. All that is needed is to have the federal government spend larger amounts, and, if need be, get the FED to monetize more Treasury obligations. The right wise heads in Washington, who would be empowered to spend as they wish, will know what is best for people, and will, by increasing federal government spending, get U.S. economic growth to a higher level. Even small private businesses will prosper. What is not to like?

The problem with this "candy store" approach to government economic policy is that it doesn't work. The U.S. federal government is already overborrowed. The concept of federal stimulus to propel growth is badly flawed, as we have seen with President Obama's recent stimulus, and Amity Shlaes' work examining FDR's fiscal stimulus programs during the Great Depression, in her excellent book "The Forgotten Man: A New History Of The Great Depression." Fiscal stimulus is more temporary in its effects in comparison to the growth of private businesses; successful private businesses will tend to grow log after the "sugar rush" of a public fiscal outlay ends. The more successful economies are mostly private sector oriented, and private sector focused.

Clearly, the U.S. needs to do more to enact federal government economic policies that promote and enhance the nation's private sector. By having a favorable, stable, predictable, institutional/legal/tax environment for domestic and foreign private investors, we will be able to grow the U.S. economy best, without unduly burdening citizens with taxes and other laws. Taking responsibility for oneself should be viewed as a virtue. Individuals' work, efforts, savings, and success should be encouraged. A federal government economic policy approach that focuses on income redistribution and expanding the relative of the federal government, such as is being described in this article, is a wrong road for the U.S.

Alright there is something wrong with greed in society that is for certain. However government and many of its supporters also are guilty of wanting more and spending less. Its almost sickening to read these articles about giving democrats even more control of what money we have worked hard for to them to spend on programs buying voters. Much of what is wrong with the world stems from the very programs and unrealistic expectations that societies can exist where people don't have to contribute to their own welfare has been the false dream of the leftist/communist for many years. Greece, Spain, France, and many others are now reaping the problems caused by this cradle to the grave type programs supported by whom? That is the problem. When no one has any reason to work or to try and get ahead they become dependent on government. That leads to eventual collapse which is where these writers would have us go. I don't doubt we need to get back to a balance of incomes that are more like the 50's and 60s, but what we don't need is the ever increasing daily advances of big government to insert it self as the decider of how we live our lives at nearly every level.

The problem with the GOP form of austerity is that not everyone will feel the cuts. The Rich get a huge tax break which those monies will be socked away in Caymen Island and Swiss bank Accounts. The rich can afford to be Libertarain since they can afford their own infrastructure due to their vast resources. If the GOP was really serious about tackling this nations debt it would do what any other responsible hard working American would do, it would reduce its spending and it would also get a second job (tax increase). Instead America will go through severe austerity cuts (except for Defense of course) while the rich get to pay less and sock away more...

The problem with your wants Orlando is that Tuesday never comes. One side continues to press for more revenue, and promises spending restraint ~in the out years~.. We are still waiting for the promises of the drunken murderer of the Senate, made 30 years ago. We are still waiting for the deficit to be cut in half, in his first term. We spent how much money, and unemployment is under 6 percent now (well, that’s what we were sold). Sorry but Whimpy has never paid for his hamburgers…

Orlando, we have tried the tax tax tax plan, what it got us is a lopsided revenue stream, where the top 5% pay 40% of the taxes.. Fair share?

The authors must realize of course this isn't going to happen. The republican party i.e. tea party, has an entirely different, in fact diametric agenda: increase the political influence of the ultra rich through unlimited campaign contributions i.e. influence buying, 'cut' the deficit by reducing the economic safety net (all savings then thrown away in tax reductions), reduce the costs paid by the influence buyers by reducing thier taxes, reduce the protection of the average consumer and investor by reducing regulatory oversight of corporations and business.

There is a disaster brewing for this country and it isn't the deficit. Older white people seem to be unable to fully comprehand it even through they sense it is coming and lash out at reasonable policies that they see as tilted to minorities and which they believe increase the transfer of tax money to lazy no-accounts so unlike themselves (a sort of "every man for himself and the devil take the hindmost" philosophy). For instance the term 'entitlement' suggests to them welfare and they happily climb on the tea party bandwagon to end 'entitlements', of course the word really means their own security in retirement and while they are happily cheering Paul Ryan will slide it out from under the next generation.

Where this disaster is actually coming from has been well documented by many sources recently but these folks seem to miss it watching Fox News: the loss of retirement pension plans with the substitution of the shell game of the 401K, the movement of jobs out-of-country by corporations like Apple that pretend to be All American success stories, the loss of union influence in protecting workers, the loss of manufacturing jobs to increase productivity resulting from computer technology, inadequate post secondary training for new jobs that require the worker to interface with new technology , and of course the looming curse of the Paul Ryan budget that, if enacted and in concert with the change in private retirement plans, will effectively end the very concept of voluntary retirement for most Americans presently younger than 50.

This isn't anything different than the authors are saying- the problem is no one can hear them through the din of Fox.

The problem with your wants Orlando is that Tuesday never comes. One side continues to press for more revenue, and promises spending restraint ~in the out years~.. We are still waiting for the promises of the drunken murderer of the Senate, made 30 years ago.

Yes, let's take a look at the promises made by the Republican President and the Republican Senate 30 years ago, and what we got over the 30 years. To be meaningful, we need to look at the 30 years before that as well and compare the two periods.

The promises were that if we drastically cut taxes at the top end, reduced the number of tax brackets, eliminated tax deductions that people and companies actually had to work for, and eased the heavy handed regulations in place since WWII, we would get faster economic growth, more private sector jobs, and a permanently low national debt. The changes were made 31 years ago. Did we get that?

Before the changes:

Top income tax rates averaged more than 80%. Top capital gains tax rate was higher than the top corporate tax rate.

GDP growth. The red line indicates the trend.

Private Sector job growth.

National Debt as a percentage of GDP.

Since the changes:

Top income tax rates average less than 40%. Top capital gains tax rate is lower than the top corporate tax rate.

GDP growth. The red line indicates the trend. The green line indicates the earlier trend extended to this period.

Private Sector job growth.

National Debt as a percentage of GDP.

As you can see, the effects of cutting the taxes and regulations were the opposite of what we were promised. GDP growth got slower rather than showing the faster growth we had been promised. The same is true for private sector job growth. The national debt skyrocketed.

We can argue ad infinitum about the specific parts of the changes that caused the disastrous results - the lowered tax rates, the shift from an incentive for active investment in hiring people and running businesses to an incentive for passive investment in paper assets, the reduced funding of social "safety net" programs, the reduced support for higher education, research, infrastructure, etc., - and to what degree each contributed. But what nobody can rationally argue with is that the combination of those changes had exactly the opposite of the effect we were promised by Reagan and his Republican Senate.

And your solution is even more of the failed "cut everything and magic will happen" approach?

What worked was a combination of very high upper end tax rates and generous tax deductions for doing the things that helped the Country thrive (hiring people and paying them well, operating job creating businesses, researching new products and processes, etc.). Those who did such things benefitted by way of their reduced tax bills, and the people they employed also paid taxes. Those who chose not to do those things funded the government investments in human capital (education, training, etc.), research, infrastructure, etc. - the things that helped the US businesses flourish and grow. It was a win-win for the Country and the economy.

What has not worked is cutting the tax rates massively and eliminating the incentives to use the saved money in ways that benefit the Country. It may be a desirable end in and of itself, according to certain philosophies, but in the real world it has been nothing short of an economic disaster.

Not everyone wants to be a teacher, cop or firefighter; you can't buy an iPad on food stamps or a new Ford on unemployment. That kind of government stimulus doesn't work, it takes private capital investment and private sector jobs to stimulate the economy. The real problem holding up the economy right now is over-regulation. I don't mean to go back to the Bush era type regulations but I mean smart reg's that protect consumers and allow business to develope. The real problem is over-zealous regulation especially by the EPA.

I'm a little confused and I am not ashamed to admit it, unlike the intelligent folks who authored this fine article. They used words including democracy frequently in all of its various forms.

And yet, They made classic statements inferring that Federal Government by intelligent redistribution of funds does good.

But,then they tout "Early America" as a desirable model while the more "Aged America" is getting worse.

Be aware the primary difference was Early America had far less percentage of government workers per population, far less Federal Governmental social care. There was less tax redistribution to Government costs. There were far larger percentage of manufacturing jobs gained from private sourced capital that bought far more good per dollar.

Unfortunately they seem to be saying is What we have become that makes us less efficient and more prone to failure, yet we need far more of the same!

We need more Socialistic evolution! We need even larger and more expensive and all inclusive Federal Government to guide us, to redistribute fairly and to take care of those millions that just can't take care of themselves! Do you citizen really believe Government can do that? Did The Soviet Union make Lenin's dream work?

Are they saying, Don't apply the almost pure Capitalism that kept us growing post the Second World War until President Johnson robbed Social Security and stripped us of the Gold standard that kept our currency strong in buying power. NO!

Lets try Socialism of Big Federal Government and wealth redistribution their way.

The authors are quite critical of Paul Ryan's plan. However, Mr. Ryan did produce a plan, not a theory, but a plan. Social and economic justice seems to resonate with the authors. If their vision of a renewed America is important, then they should invest the time and effort to write and publish a plan. A plan that can be scored by the Congressional Budget Office, A plan that can be inspected and debated. A plan that articulates all of the "Puts" and "Takes" and how their proposals are paid for. A plan that addresses the funding gaps in Social Security, Medicare and Medicaid. A plan that eliminates our deficit, retires our national debt and provides the and social and economic equality that the authors yearn for. I'm sure the current administration would welcome such a plan, because (1) I'm sure they embrace the vision the authors have put forth and (2) it is apparent they don't have a plan to share with us.

Like Eli Wallack said in the movie, The Good, The Bad and The Ugly: "If you're gonna shot, shot; don't talk"

The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said on Saturday. The ECB's Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in its Saturday edition. Until now the Bank of Greece could only accept T-Bills up to a limit of 3 billion euros ($3.70 billion) as collateral for emergency liquidity assistance (ELA) but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources. The ECB Governing Council gave this wish the green light, the paper said. The move should enable the Greek government to access up to an extra 4 billion euros of funds, the paper said, adding that this should ensure the country keeps its head above water until the "troika" of the European, the European Central Bank and the International Monetary Fund decide on the disbursement of the next tranche of money from its aid program in September. The ECB declined to comment, the paper said. The man who dies rich dies disgraced. -Andrew Carnegie, industrialist (1835-1919) I thank you Firozali A..Mulla DBA

This article, like many others, suggests more investment in science and math education. To see why this is a currently flawed strategy and what should be done instead, please read http://www.blogger.com/blogger...

The current problem is with engineering jobs and vacancies for the new engineers we create, not the education required to produce high quality engineers.